Prime Minister Malcolm Turnbull has cooled expectations of an affordable housing "centrepiece" in the budget, even as junior minister Michael Sukkar promised a policy to help first home buyers save a deposit without raiding superannuation.

For months, senior government sources have privately briefed that the housing affordability package would be the centrepiece of the budget - though they have carefully avoided saying this in public.

But in a clear sign the government is still grappling with rapidly diminishing policy options before the May 9 budget, Mr Turnbull tamped down expectations that housing affordability would be at the heart of the budget.

"I've read that in the press, but I don't think that's a fair description," he said on Friday.
"The focus of the budget is, and has to be, firstly driving continued strong economic growth. That is the tide that we have to ensure lifts all boats."

Such measures as a reduction in capital gains tax concessions and letting first home buyers raid their super for a deposit are apparently off the table, with Finance Minister Mathias Cormann saying "super for housing" was "not something we think would address the problem".

But Assistant Treasurer Mr Sukkar signalled other measures to help first home buyers would be in the budget.

"The most problematic issue for prospective home buyers is getting the deposit together," he said. "Now what I've said is, expect to see in the budget measures which assist first home buyers more quickly to get that deposit together."

People had assumed that meant allowing first home buyers to raid their super, he said, but that wasn't necessarily the case.

"If you are a first home buyer and you decide to save for a deposit, your saving rate in recent years has been slower than the rate in which the property market has grown," he said. "So if you needed to save $40,000 on day one, by the time you have got that $40,000 deposit together, actually, the market has moved to such an extent that you need 60 or 70 or 80 [thousand]. That is the key problem for first home buyers."

Amid the political debate over the Coalition's affordable housing package, and seven new affordable housing measures unveiled by Labor on Friday, the Commonwealth Bank raised fixed interest rates on investor and interest-only home loans to meet regulatory requirements amid concern about heightened risk in the housing market.

Fairfax Media has been told major elements of the government's affordable housing package have not been bedded down and key decisions will not be taken until the eleventh hour.

The government's expenditure review committee has met five times to discuss the housing package and there are more meetings to come.

Mr Turnbull's comment surprised Liberal MP John Alexander, who led calls from the backbench for action to help first home buyers, and who said: "It's been made clear this [housing affordability] is the centrepiece."

Asked why the Prime Minister was now talking down the housing package, Mr Alexander said: "I don't know. Maybe he is taking the heat out of the budget."

Options such as releasing unused Commonwealth land, an affordable housing finance corporation to drive the supply of rental property and a rule change to help retirees downsize the family home and not be penalised are still expected.

But as one Liberal operative put it: "There's not much we can do. It's about supply, and the states."

Another said the Prime Minister's comments were clearly "expectations management".

In January, Mr Turnbull promised at the National Press Club "a lot more to come on housing in the course of this year", and in early March, Treasurer Scott Morrison promised an affordable housing package in the budget that would address everything from social housing to first home buyers.

Mr Sukkar predicted the Coalition's affordable housing package would be "more substantive" than the policy "grab bag" announced by Labor, which includes a crackdown on self-managed super fund investments, tougher rules for foreign investors and a possible tax on vacant properties.